Africa Oil (AOIFF) and Continental Resources (CLR) Critical Review

Africa Oil (OTCMKTS: AOIFF) and Continental Resources (NYSE:CLR) are both oils/energy companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, profitability and risk.

Institutional & Insider Ownership

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22.4% of Continental Resources shares are owned by institutional investors. 76.9% of Continental Resources shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Africa Oil has a beta of 1.89, indicating that its share price is 89% more volatile than the S&P 500. Comparatively, Continental Resources has a beta of 1.45, indicating that its share price is 45% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Africa Oil and Continental Resources, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Africa Oil 0 0 0 0 N/A
Continental Resources 0 5 20 0 2.80

Continental Resources has a consensus price target of $56.77, indicating a potential downside of 3.70%. Given Continental Resources’ higher possible upside, analysts plainly believe Continental Resources is more favorable than Africa Oil.

Profitability

This table compares Africa Oil and Continental Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Africa Oil N/A -0.46% -0.45%
Continental Resources 25.30% 4.25% 1.37%

Valuation & Earnings

This table compares Africa Oil and Continental Resources’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Africa Oil N/A N/A -$4.53 million ($0.01) -93.35
Continental Resources $3.12 billion 7.09 $789.44 million $0.51 115.59

Continental Resources has higher revenue and earnings than Africa Oil. Africa Oil is trading at a lower price-to-earnings ratio than Continental Resources, indicating that it is currently the more affordable of the two stocks.

Summary

Continental Resources beats Africa Oil on 11 of the 12 factors compared between the two stocks.

Africa Oil Company Profile

Africa Oil Corp., together with its subsidiaries, operates as an oil and gas exploration and development company in Kenya and Ethiopia. It holds interests primarily in the East African Rift Basin. The company was formerly known as Canmex Minerals Corporation and changed its name to Africa Oil Corp. in August 2007. Africa Oil Corp. was incorporated in 1983 and is headquartered in Vancouver, Canada.

Continental Resources Company Profile

Continental Resources, Inc. is a crude oil and natural gas company with properties in the North, South and East regions of the United States. The North region consists of properties north of Kansas and west of the Mississippi River and includes North Dakota Bakken, Montana Bakken and the Red River units. The South region includes properties south of Nebraska and west of the Mississippi River including various plays in the South Central Oklahoma Oil Province (SCOOP), Sooner Trend Anadarko Canadian Kingfisher (STACK), and Arkoma Woodford areas of Oklahoma. The East region is consists of undeveloped leasehold acreage east of the Mississippi River with no drilling or production operations. As of December 31, 2016, its estimated proved reserves were 1,275 million barrels of oil equivalent (MMBoe), with estimated proved developed reserves of 519 MMBoe. As of December 31, 2016, its average daily production from South region properties was 91,088 barrels of oil equivalent (Boe) per day.

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